1.4% versus 2.2% anually adds up

 The Conference Board or Canada lays it out pretty clearly, Canada is getting left behind when it comes to improving productivity.

Ottawa-based research firm used a simulation boosting Canadian labour productivity growth by 0.8% per year higher from 1988 to 2008, the same increase as the difference between annual labour productivity growth in the US (2.2%) and Canada (1.4%) over the 20-year period.  The Conference Board notes that since the 1980s, Canada’s performance has been sluggish in multi-factor productivity (or innovation) and capital intensity, while labour quality has been relatively stable.  Previous Conference Board research found that Canada’s relatively well-educated workforce does not have the physical capital required to maximize productivity performance. 

What to do about it?  The report blames "physical capital", they mean equipment, machinery, computers, software and the like.  This is part of the answer, but is not the right answer.  Here in Canada and especially in Alberta productivity is not talked about enough. And when it is talked about there is not enough understanding about what it means and what to do about it.
I come from the UK, Lean manufacturing awareness is so much deeper than here in Canada.  Most regional colleges do a basic diploma in 5S and lean.  To quantify the difference, if you Google 5S training, Google Canada gives 54,000 results while Google UK gives 471,000 results.  A difference of 10:1 for a population difference of 2:1.  We simply do not have the awareness in Canada especially here in Western Canada about what drives productivity and what can be done about it.  Alberta Productivity is doing a great job of raising awareness.  Sadly if reports like this continue to come out and point the finger in the wrong direction it will only reinforce current misunderstanding and the opportunities that Lean offer companies will continue to be missed.

To read the report in its completeness, Canada’s Lagging Productivity: What If We Had Matched the U.S. Performance. http://www.conferenceboard.ca/documents.aspx?did=4486

Klaus - The First Day At Work

Edited highlights of the soon-to-be-classic-if-it-isn't-already German Health and Safety video. Our hapless star is Klaus the fork lift driver on his first day at work in the warehouse. He's clearly unaware of the basics of Health and Safety, taking lethal gambles with a Stanley knife and some sheet metal, and getting too easily distracted. Enjoy!



For the full version dubbed in English http://www.youtube.com/watch?v=oPpwLCvPAME&feature=related
For the full version with the original German http://www.youtube.com/watch?v=-oB6DN5dYWo&feature=related
Serous message awesomely communicated.

A lesson in communicating from Domino's Pizza!

This may appear very trivial, Domino's Pizza have introduced a pizza tracker.  It is not world shattering but it is a very good demonstration of how important communication is.  Monitoring the tracker you have some idea of when your delivery will arrive.  

Now compare that to a work situation.  How much information do you have on when parts will be available from a supplier or a design completed by engineering?  We are continually chasing information.  Here Domino's have taken away the information chasing part of the job.  What opportunities are there in your work environment to implement simple ideas to save on information chasing?

An advert for some work I am doing

 My colleague Carla and I will be running the process mapping and change management part of Productivity Alberta and Calgary Construction Association's ICT program.  Looking forward to doing this.  The construction industry is not something I have done a lot of lean or other work in before.  So a chance to learn and share.

Implementing Information & Communications Technologies  Are you Ready?

Is your legacy computer system holding your company down? Do you even have a legacy system? Either way, it’s time for an upgrade. The ICT Adoption Program can take you through the process of identifying the needs and the gaps to acquiring and implementing new Information and Communications Technology. Not only that, you’ll be paired with a mentor who can coach you through the process, putting lessons into practice.

A partnership between the Calgary Construction Association and Productivity Alberta, this series of workshops, online resources and coaching can help your company make significant, measurable productivity gains. Participants take away methods to engage the staff and decrease the barriers to new technology.

When: December 14, 2011 8:00 am – 12:00 pm Where: The Calgary Construction Association Who: The Owner, General Manager or overall key decision maker of your construction company should attend this workshop.  Note that you can register others from your company for specific workshops based on responsibility.  If you want advice, please contact us. Register: The registration form for the program is attached to this e-mail. More: To get more information about the program, click here or contact Productivity Alberta at info@productivityalberta.ca or 780-427-6648.

The challenge of defining value

I have only recently really begun to appreciate how good Toyota's definition of value is.  The Toyota definition is:

Value is the minimum activity required to change a product towards what the customer is busying.

This is a wonderfully compact and definite definition.  There is nothing loose about it, nothing is defined as in the opinion of the customer or is open to further discussion.  Two things got me thinking about this.  The first was something my father in law said.  He worked as a lecturer at NAIT teaching business studies.  We were talking about our work and he said how difficult it was to get his students to understand the idea of waste.  That comment has stuck with me as I have wondered how effectively I have communicated the definition of value and wastes to the companies and people I have been working with. 
The second thing to get me thinking about the definition of value was this story of a locksmith:

Business was bad, the locksmith confided. When he was starting out, picking locks took him forever, and sometimes he'd have to smash them open, but customers appreciated his efforts and gave generous tips. Now, as a veteran, lock-picking took him mere moments, and his clients, seeing how easy he found it, had stopped tipping. Worse, they even resented paying his fees for what seemed like so little elbow-grease.

The definition of value here is all back to front.  The value the locksmith offers is unlocking the lock.  The work I want him to achieve is to open the door.  How long that takes and how he achieves that should not be my concern.  In fact the quicker he can open the lock the quicker I can get at the contents of the safe or into the comfort of my home.  However from the story the locksmith was not being rewarded by his customers for the value he was offering.  Instead the customers were recognizing the hard work he was doing and rewarding him for him for his hard work and not the value he offered.
The preference to recognize hard work over value is very common and in some organizations institutionalized.  The worker who sweats hard and overcomes problems is often rewarded over the worker whose machine never breaks down and always delivers on time.  Or the office employee who has to stay late to get the monthly figures done is recognized over the one who quietly leaves at 5 every day.
A critical part of the lean journey is changing this mindset.   The companies that embrace lean switch their focus to maximizing the value they deliver and minimizing the hard valueless work they do.  The first step on that journey is to learn to see the difference between value and hard work.

Math and engineering aren't so difficult

A big cheese says so

Harris Corps CEO Howard Lance said this in his annual report:

Lean manufacturing improvements implemented as part of our facilities consolidation in Rochester, New York are expected to drive productivity improvements for the year in excess of 5%, and production cycle time reductions are expected at 10% to 20% across each of our product lines.

Not too shabby that, productivity up 5% and lead time reductions of 20% for a company that is not new to lean but has been doing it for a while.  
Harris Corp make sophisticated network equipment for civilian and military use www.harris.com/ 

Harris' CEO Discusses Q1 2012 Results - Earnings CallTranscript

 

A 4,600 Gallon per Minute Oil Skimmer Just Won the $1.4 Million X Challenge

This is awesome.  I am always amazed by people's inventiveness.  I am also amazed by the ability of companies to stifle their people's creativity.  The X-prize is not just for space rockets.  There is the Oil Cleanup X CHALLENGE and this is the winner:



Inspiration for the idea came from a badly thrown bucket.

Donnie said he asked Jeff to throw him a five-gallon plastic bucket to help in the recovery effort but luckily Jeff’s aim was off that day and the wind caught the bucket and blew it into the spill on the water. The wind continued to turn the bucket and Wilson noticed that as the bucket turned, oil stuck to the side of it, leading them to their first invention of oil recovery equipment. So it began.

http://www.iprizecleanoceans.org/teams/elastec

There are 2 reasons to go green not 10

List of 10 reasons to do x, y or z are a common journalistic trait, one I often think is wasteful.  If there are 8 reasons don't add two more.  The eight are valid or they are not.

Todays canadianmanufacturing.com has an article "Top 10 reasons businesses get clean".  Most of them are valid and worthy.  The two reasons why I would recommend a business to get clean they don't mention.  Reason one, your customer values it.  Many customers from Walmart to small business value their suppliers doing sustainability/green initiatives.  As Lean practitioners we know don't do anything that your customer does not value, because they don't want to pay for it.  And reason 2 being clean will make you more profit.  Reduced waste, energy and emissions all can save money, the other valid reason.
Why can we keep it simple?
If you have the spare time the article is here http://www.canadianmanufacturing.com/energy/sustainability/top-10-reasons-businesses-get-clean-45145
And if you have lots of spare time the full McKinsey article is here (which I'll admit I have not read) http://www.mckinseyquarterly.com/Energy_Resources_Materials/Environment/The_business_of_sustainability_McKinsey_Global_Survey_results_2867?pagenum=2

Square holes, whatever will they think of next

A long time ago I remember having a problem with a young trainee engineer who was very proud of his work even though it had a big problem.  The problem was the design had square holes.  This made sense as he wanted to utilize square steel bar that would mate into the square holes.  The problem was not just the stress concentration in the corners but we had no way to make the part.  Using normal machine tools the part was impossible to make, there was no broaching tools available or EDM.

Now that same engineer has a choice.  Dijet Industrial Co Ltd of Japan have worked out how to machine the perfect square.  I'm not sure if this is a serious application or just a company pushing the boundaries of knowledge in wanting to know what it could achieve.

Always learning even when going back(wards)

Sometimes to go forward you need to go backwards.  I was reminded of this this week.
A company I am working with have been working hard to improve a process that essentially involves 2 people doing non value added work.  The immediate aim being to free one of the people so they can help elsewhere in the plant.
After several months of trying to get a new piece of equipment to run as they needed the project leader candidly admitted that things were worse than before.  There had been no reduction in labor needed, in fact there had also been a increase in rejects.  We had introduced more waste into the system.

Why is this worth blogging about; because to admit fault takes bravery and also admitting fault is not something that is traditionally respected in the workplace.  This company is starting to change.  Some of its older more traditional behaviors are being lost as more constructive ones take their place.
Previously the new machine would have been accepted as the way forward, now that is not a realistic option.  So to move forward some steps back are being taken.  The process is being bench marked using the original machine.  Next the new machine will be bench marked and the differences identified.  Then we will go to the gemba, watch the process and think about the options.

The lesson to me here is sometimes it is not best to launch straight into activity as attractive as it may appear but to plan first.  A3 problem solving sheets and methodology are there for a reason, sometimes we need a reminder.

"aggregation of marginal gains" or continous improvement to you and I

If you are not a cycling nut and British born you probably did not notice that the GB cycling team had an absolutely awesome world championship.  They won 6 medals, 2 bronze, 2 silver and 2 gold including the men's road race.  In fact they lead the medal table the first time they have ever done so on the road, track cycling they have been up there for a decade.

If you look carefully you will notice a couple of differences between him and the other (slower) riders.  He is not wearing a standard cycling top but a skin suit and his helmet is different. The helmet has a perspex cover to improve aerodynamics.

In fact the whole team wore skin suits.  For a team to wear skin suits for a road race is very rare.  David Millar's Garmin team did it one year for the Champs Elysee stage of the Tour de France.  That stage was ironically won by Cavendish and Millar was the GB captain for the Worlds.  Out of picture the management team also had set up around the course communicate information to the team.  Race radios which are common for races like the Tour de France are banned at the Worlds and Olympics.

These are 3 little changes which individually would probably not make a difference.  However add them together along with all the other aggregated marginal gains that GB cycling chases and you start to make significant gains.  For GB cycling significant gains were 6 amazing medals.  And for Cavendish something else too:

Why am I writing this, to reinforce that we don't have to go chasing the big gains.  There are very few break through changes which give 10% more capacity without spending a large amount of money.  There are however many, many marginal 0.2% and 0.4% gains that are typically low cost, which aggregated together deliver the big prize.  Be it 10% more capacity or a gold medal.

Good advice,

The language maybe colourful but the message is true.  If someone is not working out for your company you need to get rid of that person or as O'Leary says whack'em.  Firing someone is not a casual decision, for many people the job they have is important to them.  It is what pays the bills for them and their family.  These are the people you want to keep, the hard working individuals who work hard for your company.  The ones who don't meet that description and a minority are often like a cancer to a company.

In too many Alberta companies, I meet owners, managers and supervisors who put up with underperforming workers.  They put up with workers who are negative about everything, don’t do their jobs correctly, hassle other employees and take advantage of their employer.  These are the workers that should have been whacked a long time ago.  And the longer they are there the more difficult and costly it becomes.

O’Leary’s cold, hard method of firing staff

So how is firing/dismissing/laying-off/de-employing/whacking/insert euphemism/  a lean concept?  First something has gone wrong, that person should not be with you.  This however is Alberta and staff can be impossible to find so chances have to be given.  The two Toyota tenets of lean are “Respect for the individual” and “Continual improvement”.  If you have one worker slacking but still getting paid and 5 others doing a full job and the slacker is not being rebuked or fired how respected are the other 5 workers?  This is the part of the employment equation that gets too often overlooked.  Too much effort is put into trying to correct the bad apples that no one notices the good ones give up or move on.  And as the good ones leave the bad apple often becomes more valuable in the eyes of their immediate supervisor and the circle becomes vicious. In this situation “Continual improvement” can barely happen if at all.

So what to do about it?  Take the advice:

So when do you whack someone? The moment you think, “Hey, this one’s not really working out.” The minute the notion enters my mind that I have to fire someone, I don’t hesitate. I don’t give the person three, four, five months to improve or change. Because I’ll tell you something else that’s unpopular to admit: problematic employees never change.

Yes it feels crap doing it.  Yes it can be mine field if you are not set up with good HR policy to follow.  Two things to remember.  One you will feel fine the next morning and the only question you will have is why you did not do it earlier.  Second you have a greater responsibility than that individual but to all the employees to ensure the good and the continuation of company.

Post script, if you need a good HR consultant to get the whacking done email me and I can forward some names I trust.

If you have a machine shop are you watching

This is the future, I may be wrong on that but i don't think so.

These may not look like much but they are very, very significant, especially if you own a machine shop.
These 2 parts are many ways the same, they are designed to do the same job.  Part 1 at the back is the traditionally machined part.  Part 2 at the front is the lighter, stronger laser sintered part, effectively it was laser printed.  And best of all its titanium.
Just think about that.  Here is a part designed for use in an aircraft that has been printed.  Just what are the implications?

• Just in time, print these off one at a time.  Set up is pretty much minimal, no batches are needed.
• It's a printer, I don't know what the training required to operate is, my guess is it is an awful lot less than operating CNC mill.
• Have one everywhere.  Imagine the inventory cost savings of not having to hold stock just one machine, bag of titanium powder and an internet connection to download the printing details.

These are just 3 changes, there must be dozens more we just have not thought about.

Disruptive technologies happen.  The internet is the one we think of most.  Lean was one too.  Who would have foreseen  Toyota, Honda and co expanding in the way they did.  Their disruptive technology being JIT, 5S, SPC and a few other simple ideas.  This I see as being a disruptive technology.  One that potentially will bring a lot more jobs back to North America.  Will those jobs belong to Canadian, American or foreign companies I don't know.  That will depend on who best understands the disruption.

Full article https://www.technologyreview.com/energy/38352/?mod=MagOur

5S for dinner time

Rather silly but also rather fun

source: http://charlesandmarie.com/een/cheat-sheet-placemat

Ray Anderson, America’s greenest businessman, died on August 8th, aged 77

Fantastic leader, now recognised as a Lean and Green pioneer.

The $400m he was saving each year by making no scrap and no off-quality tiles more than paid for the R&D and the process changes.

 

The Economist - https://www.economist.com/node/21528583

His company InterfaceFLOR - www.interfaceflor.com

Who trusts you more Walmart or Safeway

Trust is a big thing in lean manufacturing.  Only companies where trust is allowed to grow and management can be trusted by staff will lean take root. Employees have to trust management.  Trust that they won't use Lean as a quick cost cutting opportunity and slash jobs as soon as productivity rises.  Trust that their input will be valued and implemented.  Trust that Lean is not another flavor of the month.

I've been thinking about trust having read my colleague Robert Lynches article Leadership and the Structure of Trust in the European Business Review.  How much do we trust each other in our lean endeavors and how much are we trusted in life.  This question jumped out at me last night.  I was doing the family shopping at Westbrook Mall.  I parked the car by Safeway and went to grab a shopping cart.  The cart I grabbed was a Walmart one.  It did not have a chain and lock unlike the Safeway carts that you have to deposit a quarter or a loonie in before you could use it.

This surprised me, or more precisely challenged my perceptions.  I thought Walmart would need to secure their carts more than Safeway.  I don't know if this is true but it appears that Walmart trusts its customers just a little more than Safeway.  Or it could be that Walmart customers are more trustworthy than Safeway customers.
Turning the question back to Lean, how much as Lean champions are we trusted?  And what do we do to develop that trust, do we take the locks off or do we keep them in place because that is what we think everyone else does and maybe we are a little scared to trust?

Just because it looks so doesn't mean it is so

Things are not always what they appear at first glance. The best ways to know what we are talking about are to have data, not opinion and to go and take look.

Check it out for yourself. Click print and get the scissors out.
Nothing like going and seeing for yourself.

source: http://i.imgur.com/Bf8xi.jpg

Thank you Henry, Eiji and Taiichi for sharing

We all owe Henry Ford, Eiji Toyoda and Taiichi Ohno a great deal of thanks for sharing their thoughts and ideas with us. Henry Ford was one of the first to truly develop an effective production line. He also wrote about his ideas and was open to others visiting Ford factories. In fact Eiji Toyoda visited Ford's River Rouge Plant at Dearborn, Michigan in the 50s. Toyota have also been open about sharing their knowledge. Firstly training their suppliers but also working with other companies that want to make things better.
My first exposure to Lean came at Bombardier, Derby, England. Toyota had opened their first UK factory nearby and were working with other local companies that wanted to learn about Lean and improving productivity, Bombardier were one of them.

 The reason I'm writing this is a question; how would the world look and work if none of these men had shared? What would manufacturing, service and health care look like if the ideas of 5S, Poke Yoke, Kanban, Takt time, SMED... had all been patented as business processes?  Ideas that could only be used if a significant fee was paid to the patent holder.
Google has just paid $12.5 Billion for ideas. (Globe and Mail)

The Web search giant, which earlier this summer lost a high-stakes battle for Nortel’s 6,000-patent portfolio to rivals Apple, Microsoft and Research In Motion, will purchase handset manufacturer Motorola Mobility for $12.5-billion (U.S.). The acquisition target’s primary asset? An arsenal of 17,000 existing and 7,500 pending patents.

That is a lot of money to pay for ideas. The fact that Toyota and co have all shared their ideas so freely has to be celebrated.  
A second question; if those ideas had been patented how much would they be worth?